Consumer Watchdog Calls For Audit Of Tainted Process In Search For New LADWP Ratepayer Advocate

How Can One of the Foremost Utility Experts In America Not Receive A Call From The Search Committee If the Process Is Not Fixed?

Los Angeles, CA — Consumer Watchdog today called the process of picking a new ratepayer advocate to head the Office of Public Accountability at the LA Department of Water and Power biased and called for an immediate investigation by the LA City Controller.

“We write with evidence of misconduct in the selection of a new Ratepayer Advocate and call upon Controller Galperin to investigate immediately,” Consumer Watchdog's Jamie Court and Liza Tucker wrote in a letter to Mayor Eric Garcetti and City Controller Ron Galperin.

“Rumors have circulated, Mr. Mayor, that your office has sought to retain Fred Pickel, current executive director of the Office of Public Accountability at the LADWP, at all costs. As you know, we have reported that Pickel has turned a blind eye to financial impropriety at the Department and City that another ratepayer advocate would not.”

“The search committee process for replacement shows that one of the most qualified candidates for the position and foremost experts on utility matters in the state has not been contacted at all despite the fact that a final decision on the position is imminent,” the letter continued.

“It’s shocking that the former Chair of the Assembly Utilities Committee, Mike Gatto, would not receive a phone call, let alone an interview with the Citizens Committee to replace Mr. Pickel, despite being one of the most knowledgeable experts in the state on utility and ratepayer matters.He has authored numerous consumer protection laws and provided oversight of the Public Utilities Commission and state’s utilities. As you know, Mr. Mayor, your appointees and those of the City Council comprise the search committee.

“How is it possible that Gatto would not be contacted to be the city’s ratepayer advocate given his credential if the fix wasn’t in for Pickel?”

Fred Pickel, the LADWP’s first ratepayer advocate, was hired in 2012 on a five-year contract that expired in February 2017 at a salary of $298,000. Since then, the utility industry insider and one-time Enron consultant has continued month-to-month for an extra 20 months, drawing more than $470,000 with little to show for it, the letter said. Consumer Watchdog’s March 2018 report, “The Price of Pickel,” found that he has cost ratepayers $7 billion by either rubberstamping wasteful DWP decisions or failing to defend ratepayer interests. Read the report at http://www.consumerwatchdog.org/report/ThePriceofPickel

Consumer Watchdog pointed to the latest example of lack of ratepayer protection by the ratepayer advocate.

“Just recently, we received the attached letter from a whistleblower about an apparent City - LADWP boondoggle over vast, unused DWP office space with rents paid to the City coffers.

“As you may know, the LADWP rents four floors from the City at 221 North Figueroa, which has been criticized as an above-market transaction. Our staff paid the building a visit to verify what the whistleblower alleges—that LADWP ratepayers are funding the rental of space in the building to generate income for the city when the space is not really needed. We discovered the lobby’s building directory for that address was blank.

"The floors supposedly occupied by the DWP or city divisions serving it were sparsely populated at best.

“DWP’s customers currently have no ratepayer advocate to turn to for a fair accounting of such matters. That’s scandalous and must be changed.

“Ratepayers deserve a real hiring process. Mr. Mayor, if it is your intent to reappoint Mr. Pickel, stand down. Mr. Galperin, we call upon you to investigate immediately.”